January 1, 2014 December 31, 2014

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1 Stock code: th Business Report January 1, December 31, Greetings I would like to express my sincere appreciation to all investors for their continued support. I am pleased to report our results of operations for the 2th fiscal year (January 1 to December 31, ). In, we achieved the major targets of the medium-term management plan announced in February one year early. In addition, we resumed dividend payments for the first time since the dividend applicable to 27. As one way to mark our 2th anniversary, we established a new mission statement: Kenedix is dedicated to realizing the full potential of real estate. We also announced the Kenedix Vision 225: Delivering Growth via the Kenedix Model. At the same time, we announced our new medium-term management plan, which is called Partners in Growth 217. Our objective is medium to long-term growth in corporate value by following our long-term vision and achieving the goals of the new management plan. We are also dedicated to meeting the expectations of shareholders, client investors, business partners, employees and all other stakeholders. I ask for your support as the Kenedix Group continues to make progress with our mission of realizing the full potential of real estate. March 215 News & Topics Taisuke Miyajima CEO & President Kenedix Retail REIT Corporation Conducted its IPO Trading of Kenedix Retail REIT Corporation ( KRR ) shares started on February 1, 215 on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market. KRR invests primarily in neighborhood, community and other shopping centers that cater to the day-to-day needs of local area customers. As these retail facilities are in convenient locations, such as within residential areas or adjacent to major roads, people visit these facilities frequently. KRR believes that demand for these retail facilities, which include specialty stores, will continue to grow. KRR focuses its investments in this real estate category, in order to provide stable investment returns over the medium to long term, and to enliven local communities and to enhance social infrastructure. Kenedix Major Track Records in (July-December ) Date Property Category Investment Category Location Asset Size *1 Kenedix Investment Jul. Residential (3 properties) Bridge Fund Tokyo Medium-scale Approx..26bn *2 Jul. Office Opportunistic Kanagawa Small-scale Approx..23bn Jul. Retail Facility Bridge Fund Shiga Small-scale Approx..6bn Aug. Office Bridge Fund Aichi Small-scale Approx. 1.4bn Aug. Retail Facility Bridge Fund Hyogo Medium-scale Approx. 1.47bn Sep. Hotel (5% of trust beneficial interests) Bridge Fund Chiba Large-scale Approx. 2.5bn Sep. Retail Facility Bridge Fund Chiba Large-scale Approx. 1.94bn Sep. Healthcare Bridge Fund Nakano-ku, Tokyo Small-scale Approx..37bn Oct. Healthcare Bridge Fund Hyogo Small-scale Approx..27bn Oct. Retail Facility (8 properties) Loans, etc. Nationwide Large-scale Approx..21bn Oct. Residential Opportunistic Setagaya-ku, Tokyo Small-scale Approx..98bn Dec. Land, etc. Opportunistic Chuo-ku, Koto-ku, Tokyo Small-scale Approx..82bn Dec. Healthcare Bridge Fund Tama, Tokyo Small-scale Approx..54bn *1: Asset size is based on acquisition cost; development cost for development projects. Small-scale: under 5bn Medium-scale: 5bn- 1bn Large-scale: over 1bn *2: Kenedix investment is before the redemption of part (.25bn) of the Kenedix interest due to the participation of another investor.

2 Management Interview Kenedix Announces a Long-term Vision Including a 4 Trillion Yen AUM In, Kenedix Group s 2th year, there was more progress with building a powerful profit structure. Most significantly, there were big increases in revenue and earnings. Furthermore, Kenedix achieved the medium-term management plan, including AUM target of 1.4 trillion yen, one year early. Now that Kenedix has reached its 2th anniversary, the company has established a long-term vision covering the next decade. The central theme is Delivering Growth via the Kenedix Model. In the medium-term management plan, which started in, included the goals of raising AUM to 1.4 trillion yen, making principal investments of 3 billion yen and resuming dividend payments. Originally, we intended to reach these targets three years later in 215. But we succeeded in accomplishing all our goals in. To build on this momentum, we started a new medium-term management plan in 215 that is structured to build a foundation for achieving our new long-term vision. Strong growth in revenue and earnings in a favorable business climate How did Kenedix perform in and what were some highlights of the year? In, both revenue and earnings were up significantly. Revenue increased 16.7% to 26.2 billion yen, operating income increased 17.8% to 8.1 billion yen, ordinary income increased 31.3% to 6.4 billion yen, and net income was up 143.9% to 4.8 billion yen. Asset management fees were higher along with growth in AUM. Higher than planned gains on sales of properties, the result of a recovery in Japan s real estate market, were another reason for our strong performance. One more accomplishment was completing the disposition of almost all legacy assets as we sold many properties and replaced them with other holdings. Kenedix reached the medium-term management plan target one year early. Growing with partners while maximizing Base Earnings Please explain the new long-term vision. Kenedix will celebrate its 2th anniversary in April 215. At this important time in our history, we reexamined our medium to long-term goals for the Kenedix Group. The result is Kenedix Vision 225. The vision includes AUM of 4 trillion yen, Kenedix Group market capitalization of 2 trillion yen, including REITs, and an ROE of 15%in225. Our vision clearly defines the Consolidated Financial Highlights Revenue Operating Income Ordinary Income Total Assets / Net Assets Total Assets 8, 25, 8, Net Assets 2, 2, 15, 15, 4, 4, 1, 1, 5, 5, Assets Under Management (AUM) Growth of AUM Increase: billion Decrease: billion Net increase: billion (Billions of yen) Consolidated Real Estate REITs (sub sponsor) Private Funds 1, ,971 8,443 1,72 1,4 14,86 Client Investors REITs (incl. Private REIT) Private Funds Consolidated Real Estate 1,325 REITs (main sponsor) 7,349 Breakdown of AUM 12,63 1,979 11,113 11,177 9,399 1,618 1,521 1,586 1,623 1,158 1, ,432 2,718 2,841 3,392 4,544 5,289 5,484 5,319 5,426 4,963 4,13 1, ,88 Geographic Coverage Property Category 2,433 2,22 2,812 3, , Tokyo Metropolitan Area Kansai Area Chubu Area Other Areas Office Buildings Residential Logistics Facilities Retail Facilities Others (incl. Healthcare Facilities)

3 Mission Statement and Long-term Vision Kenedix is dedicated to realizing the full potential of real estate Mission Statement Delivering Growth via the Kenedix Model AUM: 4 trillion Kenedix Group market cap *1 : 2 trillion ROE: 15% (Goals for 225) Long-term Vision Kenedix Vision 225 Medium-term Management Plan Partners in Growth 217 ( ) Basic policies Increase stable earnings mainly through growth of the Asset Management Business Expand the Real Estate Investment Business primarily by using co-investments Achieve the proper balance between financial soundness and shareholder distributions Increase stable earnings Improve capital efficiency Base Earnings *2 : 4 billion (217) 3-year average ROE *3 : 8.% *1: The Kenedix Group market cap includes the market value of REITs where Kenedix serves as the main sponsor. *2: Base Earnings are gross operating income from the Asset Management Business and Real Estate Related Business less selling, general and administrative expenses. *3: 3-year average ROE is the return on equity in each year which is calculated by dividing net income by the average of equity at the beginning and end of each year. Target figures in 2 and 3 do not incorporate the effects of goodwill resulting from acquisitions. distinctive Kenedix Model of placing priority on increasing the assets we manage by using mainly REITs rather than by owning properties directly. In addition, Kenedix is dedicated to realizing the full potential of real estate as stated in our mission statement. Increasing the value of real estate is our objective. We will do this chiefly by using the Asset Management Business to bring out the hidden value of properties. Simultaneously we will take steps to assure liquidity and transparency when bringing properties to the market. What are the main elements of the new mediumterm management plan? This three-year plan, which we call Partners in Growth 217, is a milestone toward reaching the goals of the long-term vision 1 years from now. The plan has three major goals. First is to increase stable earnings mainly through growth of the Asset Management Business. Second is to expand the Real Estate Investment Business primarily by using co-investments. Third is to achieve the proper balance between financial soundness and shareholder distributions. Base Earnings of 4 billion yen and a three-year average ROE of 8% are two targets of the plan. We define Base Earnings as gross operating income from the Asset Management Business and Real Estate Related Business less selling, general and administrative expenses. We plan to raise our ROE by using the growth of consistent Base Earnings along with returns from our investment portfolio. At the same time, we will grow with our business partners. This is why we decided to call the new plan Partners in Growth. Using a stable earnings base to seek more ways to unlock real estate value Please explain your primary initiatives in 215 and your outlook for revenue and earnings. I think that our operating environment will remain favorable in 215. By making steady progress with Partners in Growth 217, I believe that our consistent growth will continue in 215. There will be more measures for the growth of AUM. For example, following the recent IPO of a retail facility REIT, we are preparing for the launch of a healthcare REIT. Additionally, we will capitalize on the currently strong market conditions to make a large volume of new investments. In 215, we forecast a 4.6% increase in ordinary income to 6.7 billion yen and a 23.8% increase in net income to 6. billion yen. We plan to pay a dividend for 215 of 4 yen per share compared with 3 yen for. Do you have a final message for your shareholders? In, in part because of a favorable business climate, our revenue and earnings were much higher than we had planned. We reached our medium-term management plan targets one year ahead of schedule as a result. We also accomplished our long-awaited goal of paying a dividend again. Moreover, we have established a foundation for the consistent distribution of earnings to shareholders. The Kenedix Group is firmly committed to making steady progress toward the goals of the long-term vision Kenedix Vision 225 and the medium-term management plan Partners in Growth 217. As we move forward, we will constantly upgrade and reinforce the Kenedix Model, which is a business model that no company can imitate. We are also dedicated to meeting the expectations of shareholders, client investors, business partners, employees and all other stakeholders. I ask for the support of shareholders as we continue to take the actions needed to accomplish our goals.

4 An Overview of Business Unit Performance and Goals by Kenedix Executives Kenedix Retail REIT Corporation A new listed REIT, which owns retail facilities for day-to-day needs, is managed by the Kenedix Group as another source of its growth Kenedix Retail REIT Corporation ( KRR ), which conducted its initial public offering in February 215, is the first Kenedix Group REIT that invests solely in retail facilities. KRR uses the distinctive investment strategy of concentrating on neighborhood, community and other shopping centers that serve nearby residents and sell products people purchase frequently. KRR is expected to become an important element of the Kenedix Group s growth in the coming years. Akihiro Asano and COO, Head of Retail REIT Division of Kenedix Real Estate Fund Management, Inc. Please describe the operations of the Kenedix Group s new retail REIT. The shares of KRR were listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market on February 1, 215. KRR invests primarily in retail facilities that cater to the day-to-day needs of local area customers. KRR owns neighborhood shopping centers and other locations with grocery stores, specialty stores and other merchants selling mainly household products. Retail facilities in Japan are serving an increasingly smaller area as the population ages. In addition, specialty stores are accounting for a larger share of sales because of the diversification of customers needs. KRR targets shopping centers and other facilities serving customers within 2 to 5 kilometers. All holdings are in convenient locations, such as within residential areas or adjacent to major roads. Tenants sell products and services that result in frequent visits. This is the first REIT in Japan that specializes in this category of retail facilities. A number of these REITs have been successful in the United States, the world s most advanced REIT market, and a few other countries. I believe that prospects are excellent for the success of KRR, too. What are you doing to acquire the knowledge needed to purchase and operate retail properties? Kenedix is well known as an organization that invests in office buildings. But our group has also made investments in many retail facilities in Japan. So we have considerable expertise involving the development and operation of these properties. For additional support for retail operations, we have signed agreements with three companies to receive pipeline support: Sumitomo Mitsui Finance and Leasing Co., Ltd., P&D Consulting Co., Ltd., and Nippon Commercial Development Co., Ltd. All three are highly skilled in the development and operation of retail facilities. Combining the know-how of the Kenedix Group and these three companies will enable us to develop and operate highly competitive retail facilities. What is your strategy for growth? KRR currently owns 18 properties with a value of about 8 billion yen based on the acquisition cost. These properties include the Fululu Garden Yachiyo in the city of Yachiyo in Chiba prefecture and the Roseo Mito in the city of Mito in Ibaraki prefecture. Increasing holdings to about 2 billion yen over the next three years is the first goal. That means we want to add about 4 billion yen of properties every year. I expect about half of this growth to come from the pipeline support companies and the remainder to come from acquisitions with the cooperation of the Kenedix Group. Most of the REIT s properties will be in Japan s four major metropolitan areas: Tokyo, Osaka, Nagoya and Fukuoka. To avoid concentrating too many holdings in a few areas, KRR will also invest in properties in cities with a stable population of at least 2,. KRR has received an A long-term issuer rating from Japan Credit Rating Agency, Ltd. Our goal is to raise this rating one notch as soon as possible as we use both internal and external sources for growth. By achieving this growth, I believe that the retail REIT business can become a core business of the Kenedix Group along with our office and residential operations. Primary Holdings of Kenedix Retail REIT Corporation Large Large suburban shopping centers RSC (Regional shopping centers) GMS (General merchandise stores) Outlet malls Small Asset Size Day-to-day needs retail facilities Retail properties selling products and services that cater to the day-to-day needs of local area customers, and that are within residential areas, adjacent to major roads and in other convenient locations NSC SM CSC Neighborhood shopping centers Supermarkets Community shopping centers Grocery stores and other specialty retailers Grocery stores Radius of 3 to 5 kilometers High Radius of 3 kilometers Station-front retail facilities Specialty stores SS One or more core tenants and specialty retailers Retail facilities beside a railway station in a metropolitan area Drug stores, convenience stores, fitness clubs, electric appliance stores and other specialty retailers Radius of 5 to 1 kilometers Radius of 3 to 1 kilometers Radius of 1 to 1 kilometers Frequency of Customer Visits Urban retail facilities Shops of well-known brands and other stores These retail facilities account for the majority of holdings of existing J-REITs that invest primarily in retail facilities. Low

5 Keyword of Kenedix Takahiro Uchida Executive Officer, Head of Business Development Department Please explain the reason for the establishment of the Business Development Department. This department was created in October chiefly for the purpose of developing new types of fund businesses. We identify business sectors where the Kenedix Group can be a strong competitor and that can contribute to earnings in the future. One example is new asset classes that do not belong to our traditional office and residential operations. We may also look for investors in Japan and other countries that are interested in investment vehicles other than the funds and REITs the Kenedix Group currently manages. Another important role is the use of acquisitions, alliances and other actions to extend our real estate related operations into new business fields. How will the new department contribute to meeting the strategic objectives of the Kenedix Group? Partners in Growth 217, our new medium-term management plan, has three key themes: add new categories of AUM, such as health care and infrastructure; offer more non-asset real estate services and provide services that raise the value of AUM; and expand overseas operations by forming ties with new investors, making more overseas investments and other activities. To create new sources of growth, the Business Development Department must function as a type of internal incubator that consistently produces new businesses that are slightly ahead of emerging market trends. Of course, the Kenedix Group has started many new businesses since its establishment. But this department gives the group a single unit for launching businesses and Building a Stronger Foundation for More Growth performing the associated coordination work. This allows us to operate across the entire group while focusing on strategic objectives. Overcoming challenges in order to enter new markets and business domains has always been a key component of the Kenedix DNA. We will use this spirit to search for opportunities and select the ones with the most growth potential. Finally, we will work with the real estate professionals in other units of the Kenedix Group to achieve the full potential of these new businesses. More specifically, what types of businesses are you considering? Our real estate business has grown beyond the office and residential sectors along with the expansion of the real estate investment market. The Kenedix Group also invests in retail, healthcare and a variety of properties. Continuing to diversify the assets our group manages will contribute to growth as well as the stability of our operations. I am unable to talk about a specific project due to the confidential nature of our operations. But in the real estate sector, I can say that we are interested in starting investment fund operations involving medical facilities, IT facilities and public-sector infrastructure. We would take these actions based on the consensus of investors. In the future, Kenedix may move one step away from real estate to participate in sectors associated with public-sector infrastructure. For example, Kenedix may come up with an investment scheme for critical infrastructure components like highways, airports and sewer systems. I think this could improve the efficiency of financing and constructing high-quality infrastructure projects. Cooperation with NTT Urban Development Corporation November Joint activities for fund operations (including REITs) Joint participation in real estate development projects Creating and enlarging business opportunities by sharing information Other joint activities for businesses and operations that will yield benefits for the two companies or their subsidiaries and affiliates As part of this cooperation, Kenedix purchased a 3% equity interest in Premier REIT Advisors Co., Ltd. (PRA), an asset management company of Premier Investment Corporation. Establishment of the Business Development Department October This department was established for the purpose of starting new types of investment funds. Targets opportunities for funds in the infrastructure, energy and other sectors that differ from current real estate investment funds One goal is to attract more inbound investments from overseas investors Overseas operations Business Development Department Laying the groundwork for new growth by creating businesses that are slightly ahead of emerging market trends The mission of the Business Development Department, which was formed in October, is to build a base for the success of Kenedix over next decade. For example, the department s staff seeks new investment categories outside the core office sector and forms relationships with overseas investors. The primary goal is to create entirely new business activities in fields where Kenedix currently has no presence. Establishment of a Singapore Representative Office January 215 Aisa Hotel & Residence: Established a company managing extended-stay hotels and residential properties in the ASEAN region November

6 Company Profile (As of December 31, ) Company Information Shares Issued and Shareholders Company name Kenedix, Inc. Total number of authorized shares 35,, Founded April 17, 1995 Total number of shares outstanding 265,658,2 Head office KDX Nihonbashi Kabutocho Building, 6-5 Nihombashi Kabutocho, Chuo-ku, Tokyo, Number of shareholders Capital 4,237,365,89 yen Name of Shareholders Employees 11 (266 on a consolidated basis) Major banking relationships Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Development Bank of Japan Inc. Sumitomo Mitsui Trust Bank, Limited Resona Bank, Limited Mizuho Bank, Ltd. Aozora Bank, Ltd. Investment and management of diversified real estate assets Our business Management Team Chairman Major shareholders (Top 5) CEO & President Taisuke Miyajima Taiji Yoshikawa Soushi Ikeda Masahiko Tajima Shuhei Shiozawa Yasuo Ichikawa Ko Sekiguchi 11,67, Japan Trustee Services Bank, Ltd. (Trust Account) 1,164, Japan Securities Finance Co., Ltd. 7,468, The Master Trust Bank of Japan, Ltd. (Trust Account) 7,371, SBI Securities Co., Ltd. 7,297, Distribution of Shares in Terms of Category of Holders Corporate Harutaka Hamaguchi Corporate Shintaro Kanno Corporate Haruo Funabashi Securities companies Other domestic companies 39,539,23 (14.88%) 1,367,12 (3.9%) Financial institutions Individuals / others 48,31,3 (18.9%) 121,918,239 (45.89%) Note: The category Individuals/others includes shares in the name of Japan Securities Depository Center, Inc. IR Calendar February Announcement of full year results March Memorandum for Shareholders Public announcements Foreign companies 45,629,846 (17.18%) 172,6 (.6%) General meeting of Shareholders May Kenedix Real Estate Fund Management, Inc. Kenedix Property Management,Inc. Space Design, Inc. Telephone inquiries Shareholding (%) State Street Bank And Trust Company Kenedix Group Companies Mailing address Shares held Individual foreigners Atsushi Kawashima Corporate Tetsuo Ueda Business year Ordinary General Meeting of Shareholders Record date Transfer agent 52,625 Announcement of 1Q results August Announcement of 2Q results November Announcement of 3Q results Website January 1 to December 31 To be held in March every year December 31 every year Sumitomo Mitsui Trust Bank, Limited 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo Sumitomo Mitsui Trust Bank, Limited Stock Transfer Agency Division 8-4, Izumi 2-chome, Suginami-ku, Tokyo, (Toll free in Japan) Notices will be posted in electronic format on our internet web page ( kenedix.com). However, notices will be published in the Nihon Keizai Shimbun when it is impossible to make electronic notification for unavoidable reasons. Recent operating performance updates, IR materials and press releases are available. KDX Nihonbashi Kabutocho Building, 6-5 Nihombashi Kabutocho, Chuo-ku, Tokyo, Japan kenedix Search